Thursday, June 04, 2009

It's Tough For Some Single Guys in the Man-Cession: Chicks Don't Dig Unemployed Men

NEW YORK — Sean Hamilton considered stopping his search for that special someone when he lost his job in January. With 90 percent less income and no unemployment coming in, the 34-year-old IT professional couldn't really pay for a dinner date. And how would he explain his financial situation without coming across as a slacker?

"To speak plainly, chicks don't dig a broke guy," said the Dallas resident, now a part-time consultant. So he came up with a strategy: "I don't bring it up."

My oh my, 345000 new people lost jobs and the unemployment rate rose to 9.4%. That rate, by the way, exceeds the "more adverse" scenario of the Fed's stress tests for banks. The unemployment rate for adult men rose to 9.8%.

Buh, buh, but things are getting tougher for these guys at a slower rate. If you recall from Principles of Microeconomics, even a firm which is losing money will continue to produce if it can still cover its fixed costs. So there is a natural floor on employment for operational firms. It doesn't take much time, though, for them to go from the last rung of the ladder to zero if the economy stays weak. "Watch that last step, it's a doozy!"

Exactly how many more construction jobs can be cut now that so many are gone? In poker, we call it "The Risk of Ruin". When you're down to the felt and you've passed your ATM limit, there's nothing left to play with.

Looking back to your May 8 post about the 120K+ employment gain from the previous BLS employment release, I noticed the current one had a decline of 437K jobs in contrast. http://www.bls.gov/news.release/empsit.nr0.htm

You considered it a good sign in May. Am I right in thinking the decline is a disaster? We have 787K newly unemployed plus a reduction in 437K in the employed number although the civilian labor force went up. What do you make of this? Just curious.